Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2020

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

Note 14 Condensed Consolidating Financial Information

Nabors has fully and unconditionally guaranteed on a joint and several basis all of the issued public debt securities of Nabors Delaware, a 100% wholly owned subsidiary. The following condensed consolidating financial information is included so that separate financial statements of Nabors Delaware are not required to be filed with the SEC. The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

The following condensed consolidating financial information presents condensed consolidating balance sheets as of March 31, 2020 and December 31, 2019, statements of income (loss) and statements of other comprehensive income (loss) for the three months ended March 31, 2020 and 2019, and statements of cash flows for the three months ended March 31, 2020 and 2019 of (a) Nabors, parent/guarantor, (b) Nabors Delaware, issuer of public debt securities guaranteed by Nabors, (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Nabors and its subsidiaries and (e) Nabors on a consolidated basis.

Condensed Consolidating Balance Sheets

	March 31, 2020
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/Issuer/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
	ASSETS
Current assets:
Cash and cash equivalents	$	860	$	83	$	479,579	$	—	$	480,522
Short-term investments		—		—		9,136		—		9,136
Accounts receivable, net		—		—		454,718		—		454,718
Inventory, net		—		—		173,991		—		173,991
Assets held for sale		—		—		1,936		—		1,936
Other current assets		50		—		150,483		—		150,533
Total current assets		910		83		1,269,843		—		1,270,836
Property, plant and equipment, net		—		—		4,597,308		—		4,597,308
Goodwill		—		—		—		—		—
Intercompany receivables		13,535		—		23,439		(36,974)		—
Investment in consolidated affiliates		2,568,327		4,980,066		4,423,623		(11,972,016)		—
Deferred income taxes		—		434,919		280,545		(434,919)		280,545
Other long-term assets		—		99		167,086		(7,326)		159,859
Total assets	$	2,582,772	$	5,415,167	$	10,761,844	$	(12,451,235)	$	6,308,548
	LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—	$	—
Trade accounts payable		1,143		91		296,040		—		297,274
Accrued liabilities		23,920		9,750		218,994		—		252,664
Income taxes payable		—		—		23,057		—		23,057
Current lease liabilities		—		—		11,875		—		11,875
Total current liabilities		25,063		9,841		549,966		—		584,870
Long-term debt		984,459		2,410,880		—		(7,325)		3,388,014
Other long-term liabilities		—		20,731		241,211		—		261,942
Deferred income taxes		—		—		437,719		(434,919)		2,800
Intercompany payable		17,328		251,943		(232,297)		(36,974)		—
Total liabilities		1,026,850		2,693,395		996,599		(479,218)		4,237,626
Redeemable noncontrolling interest in subsidiary		—		—		429,824		—		429,824
Shareholders’ equity		1,555,922		2,721,772		9,250,244		(11,972,017)		1,555,921
Noncontrolling interest		—		—		85,177		—		85,177
Total equity		1,555,922		2,721,772		9,335,421		(11,972,017)		1,641,098
Total liabilities and equity	$	2,582,772	$	5,415,167	$	10,761,844	$	(12,451,235)	$	6,308,548

Condensed Consolidating Balance Sheets

	December 31, 2019
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
	ASSETS
Current assets:
Cash and cash equivalents	$	319	$	38	$	435,633	$	—	$	435,990
Short-term investments		—		—		16,506		—		16,506
Accounts receivable, net		—		—		453,042		—		453,042
Inventory, net		—		—		176,341		—		176,341
Assets held for sale		—		—		2,530		—		2,530
Other current assets		50		—		164,207		—		164,257
Total current assets		369		38		1,248,259		—		1,248,666
Property, plant and equipment, net		—		—		4,930,549		—		4,930,549
Goodwill		—		—		28,380		—		28,380
Intercompany receivables		51		—		2,611		(2,662)		—
Investment in consolidated affiliates		2,001,607		5,780,656		4,226,017		(12,008,280)		—
Deferred income taxes		—		431,441		305,844		(431,441)		305,844
Other long-term assets		—		99		254,445		(7,325)		247,219
Total assets	$	2,002,027	$	6,212,234	$	10,996,105	$	(12,449,708)	$	6,760,658
	LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—	$	—
Trade accounts payable		128		1		295,030		—		295,159
Accrued liabilities		8,579		51,701		273,002		—		333,282
Income taxes payable		—		—		14,628		—		14,628
Current lease liabilities		—		—		13,479		—		13,479
Total current liabilities		8,707		51,702		596,139		—		656,548
Long-term debt		—		3,340,545		—		(7,325)		3,333,220
Other long-term liabilities		—		29,331		262,853		—		292,184
Deferred income taxes		—		—		434,590		(431,441)		3,149
Intercompany payable		10,508		231,759		(239,605)		(2,662)		—
Total liabilities		19,215		3,653,337		1,053,977		(441,428)		4,285,101
Redeemable noncontrolling interest in subsidiary		—		—		425,392		—		425,392
Shareholders’ equity		1,982,812		2,558,897		9,449,382		(12,008,280)		1,982,811
Noncontrolling interest		—		—		67,354		—		67,354
Total equity		1,982,812		2,558,897		9,516,736		(12,008,280)		2,050,165
Total liabilities and equity	$	2,002,027	$	6,212,234	$	10,996,105	$	(12,449,708)	$	6,760,658

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended March 31, 2020
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/Issuer/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Revenues and other income:
Operating revenues	$	—	$	—	$	718,364	$	—	$	718,364
Earnings (losses) from unconsolidated affiliates		—		—		—		—		—
Earnings (losses) from consolidated affiliates		(372,641)		92,561		80,919		199,161		—
Investment income (loss)		—		—		(2,653)		(545)		(3,198)
Total revenues and other income		(372,641)		92,561		796,630		198,616		715,166
Costs and other deductions:
Direct costs		—		—		461,840		—		461,840
General and administrative expenses		1,961		237		55,348		(162)		57,384
Research and engineering		—		—		11,409		—		11,409
Depreciation and amortization		—		32		227,031		—		227,063
Interest expense, net		17,022		37,703		(3)		—		54,722
Impairments and other charges		—		—		276,434		—		276,434
Other, net		171		(22,852)		5,409		162		(17,110)
Intercompany interest expense, net		32		—		(32)		—		—
Total costs and other deductions		19,186		15,120		1,037,436		—		1,071,742
Income (loss) from continuing operations before income taxes		(391,827)		77,441		(240,806)		198,616		(356,576)
Income tax expense (benefit)		—		(3,478)		21,171		—		17,693
Income (loss) from continuing operations, net of tax		(391,827)		80,919		(261,977)		198,616		(374,269)
Income (loss) from discontinued operations, net of tax		—		—		(93)		—		(93)
Net income (loss)		(391,827)		80,919		(262,070)		198,616		(374,362)
Less: Net (income) loss attributable to noncontrolling interest		—		—		(17,465)		—		(17,465)
Net income (loss) attributable to Nabors		(391,827)		80,919		(279,535)		198,616		(391,827)
Less: Preferred stock dividend		(3,652)		—		—		—		(3,652)
Net income (loss) attributable to Nabors common shareholders	$	(395,479)	$	80,919	$	(279,535)	$	198,616	$	(395,479)

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended March 31, 2019
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Revenues and other income:
Operating revenues	$	—	$	—	$	799,640	$	—	$	799,640
Earnings (losses) from unconsolidated affiliates		—		—		(5)		—		(5)
Earnings (losses) from consolidated affiliates		(115,046)		73,918		35,117		6,011		—
Investment income (loss)		—		—		10,205		(528)		9,677
Total revenues and other income		(115,046)		73,918		844,957		5,483		809,312
Costs and other deductions:
Direct costs		—		—		520,957		—		520,957
General and administrative expenses		2,414		277		65,650		(174)		68,167
Research and engineering		—		—		13,520		—		13,520
Depreciation and amortization		—		31		210,360		—		210,391
Interest expense, net		—		52,750		(398)		—		52,352
Impairments and other charges		—		—		—		—		—
Other, net		237		(2,667)		19,758		174		17,502
Intercompany interest expense, net		12		—		(12)		—		—
Total costs and other deductions		2,663		50,391		829,835		—		882,889
Income (loss) from continuing operations before income taxes		(117,709)		23,527		15,122		5,483		(73,577)
Income tax expense (benefit)		—		(11,590)		41,389		—		29,799
Income (loss) from continuing operations, net of tax		(117,709)		35,117		(26,267)		5,483		(103,376)
Income (loss) from discontinued operations, net of tax		—		—		(157)		—		(157)
Net income (loss)		(117,709)		35,117		(26,424)		5,483		(103,533)
Less: Net (income) loss attributable to noncontrolling interest		—		—		(14,176)		—		(14,176)
Net income (loss) attributable to Nabors	$	(117,709)	$	35,117	$	(40,600)	$	5,483	$	(117,709)
Less: Preferred stock dividend		(4,313)		—		—		—		(4,313)
Net income (loss) attributable to Nabors common shareholders	$	(122,022)	$	35,117	$	(40,600)	$	5,483	$	(122,022)

Condensed Consolidating Statements of Comprehensive Income (Loss)

	Three Months Ended March 31, 2020
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/Issuer/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Net income (loss) attributable to Nabors	$	(391,827)	$	80,919	$	(279,535)	$	198,616	$	(391,827)
Other comprehensive income (loss) before tax
Translation adjustment attributable to Nabors		(17,365)		12		(17,365)		17,353		(17,365)
Pension liability amortization and adjustment		51		51		102		(153)		51
Unrealized gains (losses) and amortization on cash flow hedges		143		143		143		(286)		143
Other comprehensive income (loss) before tax		(17,171)		206		(17,120)		16,914		(17,171)
Income tax expense (benefit) related to items of other comprehensive income (loss)		47		47		94		(141)		47
Other comprehensive income (loss), net of tax		(17,218)		159		(17,214)		17,055		(17,218)
Comprehensive income (loss) attributable to Nabors		(409,045)		81,078		(296,749)		215,671		(409,045)
Net income (loss) attributable to noncontrolling interest		—		—		17,465		—		17,465
Translation adjustment attributable to noncontrolling interest		—		—		—		—		—
Comprehensive income (loss) attributable to noncontrolling interest		—		—		17,465		—		17,465
Comprehensive income (loss)	$	(409,045)	$	81,078	$	(279,284)	$	215,671	$	(391,580)

Condensed Consolidating Statements of Comprehensive Income (Loss)

	Three Months Ended March 31, 2019
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Net income (loss) attributable to Nabors	$	(117,709)	$	35,117	$	(40,600)	$	5,483	$	(117,709)
Other comprehensive income (loss) before tax
Translation adjustment attributable to Nabors		9,190		(4)		9,190		(9,186)		9,190
Pension liability amortization and adjustment		54		54		108		(162)		54
Unrealized gains (losses) and amortization on cash flow hedges		140		140		140		(280)		140
Other comprehensive income (loss) before tax		9,384		190		9,438		(9,628)		9,384
Income tax expense (benefit) related to items of other comprehensive income (loss)		46		46		92		(138)		46
Other comprehensive income (loss), net of tax		9,338		144		9,346		(9,490)		9,338
Comprehensive income (loss) attributable to Nabors		(108,371)		35,261		(31,254)		(4,007)		(108,371)
Net income (loss) attributable to noncontrolling interest		—		—		14,176		—		14,176
Translation adjustment attributable to noncontrolling interest		—		—		52		—		52
Comprehensive income (loss) attributable to noncontrolling interest		—		—		14,228		—		14,228
Comprehensive income (loss)	$	(108,371)	$	35,261	$	(17,026)	$	(4,007)	$	(94,143)

Condensed Consolidating Statements Cash Flows

	Three Months Ended March 31, 2020
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/Issuer/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Net cash provided by (used for) operating activities	$	10,163	$	(71,734)	$	125,578	$	(4,845)	$	59,162
Cash flows from investing activities:
Sales and maturities of investments		—		—		1,835		—		1,835
Cash paid for investments in consolidated affiliates		(977,000)		—		(81,797)		1,058,797		—
Capital expenditures		—		—		(59,430)		—		(59,430)
Proceeds from sales of assets and insurance claims		—		—		6,822		—		6,822
Change in intercompany balances		—		913,387		(913,387)		—		—
Net cash provided by (used for) investing activities		(977,000)		913,387		(1,045,957)		1,058,797		(50,773)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts		—		—		55		—		55
Proceeds from issuance of long-term debt		1,000,000		—		—		—		1,000,000
Reduction of long-term debt		—		(1,068,405)		—		—		(1,068,405)
Debt issuance costs		(15,737)		—		—		—		(15,737)
Proceeds from revolving credit facilities		—		795,000		—		—		795,000
Reduction in revolving credit facilities		—		(650,000)		—		—		(650,000)
Repurchase of preferred shares		(12,127)		—		(1,731)		—		(13,858)
Dividends to common and preferred shareholders		(8,209)		—		(273)		545		(7,937)
Proceeds from issuance of intercompany debt		18,200		—		(18,200)		—		—
Paydown of intercompany debt		(13,200)		—		13,200		—		—
Proceeds from parent contributions		—		81,797		977,000		(1,058,797)		—
Distribution from subsidiary to parent		—		—		(4,300)		4,300		—
Other changes		(1,549)		—		3		—		(1,546)
Net cash (used for) provided by financing activities		967,378		(841,608)		965,754		(1,053,952)		37,572
Effect of exchange rate changes on cash and cash equivalents		—		—		(2,219)		—		(2,219)
Net increase (decrease) in cash, cash equivalents and restricted cash		541		45		43,156		—		43,742
Cash, cash equivalents and restricted cash, beginning of period		319		38		441,681		—		442,038
Cash, cash equivalents and restricted cash, end of period	$	860	$	83	$	484,837	$	—	$	485,780

Condensed Consolidating Statements Cash Flows

	Three Months Ended March 31, 2019
					Other
	Nabors		Nabors		Subsidiaries
	(Parent/		Delaware		(Non-		Consolidating
	Guarantor)		(Issuer)		Guarantors)		Adjustments		Total
	(In thousands)
Net cash provided by (used for) operating activities	$	55,162	$	(88,799)	$	161,959	$	(58,468)	$	69,854
Cash flows from investing activities:
Purchases of investments		—		—		(4,221)		—		(4,221)
Sales and maturities of investments		—		—		1,134		—		1,134
Cash paid for acquisitions of businesses, net of cash acquired		—		—		(2,929)		—		(2,929)
Cash paid for investments in consolidated affiliates		—		—		(4,000)		4,000		—
Capital expenditures		—		—		(141,070)		—		(141,070)
Proceeds from sale of assets and insurance claims		—		—		2,642		—		2,642
Change in intercompany balances		—		(1,627)		1,627		—		—
Net cash provided by (used for) investing activities		—		(1,627)		(146,817)		4,000		(144,444)
Cash flows from financing activities:
Reduction in long-term debt		—		(43,540)		—		—		(43,540)
Debt issuance costs		—		(35)		—		—		(35)
Proceeds from revolving credit facilities		—		180,000		—		—		180,000
Reduction in revolving credit facilities		—		(50,000)		—		—		(50,000)
Proceeds from (payments for) short-term borrowings		—		—		289		—		289
Proceeds from issuance of common shares, net of issuance costs		6		—		(6)		—		—
Dividends to common and preferred shareholders		(28,557)		—		(376)		3,168		(25,765)
Proceeds from (payments for) issuance of intercompany debt		25,000		—		(25,000)		—		—
Paydown of intercompany debt		(50,500)		—		50,500		—		—
Proceeds from parent contributions		—		4,000		—		(4,000)		—
Distribution from subsidiary to parent		—		—		(55,300)		55,300		—
Other changes		(1,251)		—		(242)		—		(1,493)
Net cash (used for) provided by financing activities		(55,302)		90,425		(30,135)		54,468		59,456
Effect of exchange rate changes on cash and cash equivalents		—		—		(2,791)		—		(2,791)
Net increase (decrease) in cash, cash equivalents and restricted cash		(140)		(1)		(17,784)		—		(17,925)
Cash, cash equivalents and restricted cash, beginning of period		474		42		450,564		—		451,080
Cash, cash equivalents and restricted cash, end of period	$	334	$	41	$	432,780	$	—	$	433,155